Film funding tax break is a big hit

GETTING into the movies is no easier now than when it was dominated by Hollywood and the Rank starlets system, but being rich, as always, is a great help. For those who may have little talent but plenty of financial flair, there are many openings away from the traditional casting couch approach.

The industry is constantly seeking affluent individuals to finance films. If they have tax concerns so much the better, as thanks to Labour's former Culture Secretary Chris Smith and Chancellor Gordon Brown, there are plenty of schemes to ease such burdens.

The 1997 Finance Act provided new rules for writing off the product and acquisition expenses of British films costing less than £15m to make. The all-important Section 48 allows 100% write-off of costs in the year the film is completed and such relief has now been extended until at least 2005.

Among those unfazed by being close to such a glamorous industry is Martin Turner, editor of Tax Efficient Review. His views are a little more circumspect. 'Most of those who invest do so to pay off loans on private houses because they will effectively be paying interest at 4.25% which is cheaper than commercial rates. There is little risk in putting money into film, but also no upside,' he says, discounting the lure of association with a big hit.

Today, quite a few companies are offering sale and leaseback deals, but claiming leadership is Future Film Group. It says it is the only film organisation in the UK with a combined offering of finance, distribution and postproduction facilities.

Its most high-profile project is Enigma, starring Titanic rose Kate Winslet and Dougray Scott from Mission:Impossible. The film has achieved critical acclaim and box office success. Set in Bletchley Park, the military base 40 miles north of London, it is about the men and women boffins, who cracked the Nazis' codes, which helped to secure victory in the Second World War. Future Film raised almost 10% of the budget using Section 48 relief schemes.

Another production involving Future Film and its principals is Last Orders, starring Michael Caine, Bob Hoskins and Helen Mirren. It provided 16% of financing on sale and leaseback transactions, together with the purchase of UK rights. The film will be on general release from 11 January.